presentazione 3q16 uk - intesa sanpaolo group
TRANSCRIPT
November 4, 2016
9M16 Results
A Strong Bank,Delivering Growth
Solid Performance
9M: Solid Performance
€2.3bn Net income
(1) Including €895m additional net capital gain from Setefi and ISP Card disposal to be booked in Q4(2) Pro-forma fully loaded Basel 3 (30.9.16 financial statements considering the total absorption of DTA related to goodwill realignment/adjustments to loans and the expected absorption of DTA on losses carried
forward); including estimated benefits from the Danish Compromise (14bps)
Common Equity(2) ratio at 13.0% well above SREP + SIB requirements even under EBA stress test adverse scenario
Cost/Income ratio at 49.9%, among the best in Europe
Declining NPL stock (~-€5bn in one year) driven by the lowest NPL inflow since ISP was created, coupled with increased NPL coverage
1
€3.2bn pro-forma(1) Net income already covering full dividend commitment for the year
All Stakeholders Benefit from Our Performance
Employees
Public Sector
Taxes(1), € bn
Households and Businesses
Medium/Long-term new lending, € bn
9M16
3.9
40
9M16
9M16
1.6
Personnel expenses, € bn
Shareholders
3.2 3.0
9M16 Net income
2016dividend commitment
9M16 Net income + Setefi/ISP Card net capital gain
2.3
€ bn
Of which €34bn in Italy Excess capacity of ~4,500 people retained and now contributing to key growth initiatives
(1) Direct and indirect
% of dividendcommitment
>100%>75%
2
ISP: an Accelerator for the Growth of the Real Economy in Italy
(1) Deriving from Non-performing loans outflow
…and to recover
~34~29~19 +77%
9M15 9M169M14
ISP: a bridge towards internationalisation ISP: an innovation driver (e.g., innovation centre located in the ISP tower in Turin) ISP: an engine for social sector initiatives (e.g., Banca Prossima, the largest
lender to the Social Sector in Italy)
ISP: supporting the Italian economy to grow…
Italian companies helped to get back to performing status(1)
Medium/Long-term new lending to Italian households and businesses, € bn
9M14
~6,700
~17,100
9M169M15
~13,500+155%
~45,600 since 2014
3
9M: Highlights
(1) Pro-forma fully loaded Basel 3 (30.9.16 financial statements considering the total absorption of DTA related to goodwill realignment/adjustments to loans and the expected absorption of DTA on losses carried forward); including estimated benefits from the Danish Compromise (14bps)
Solid economic performance: €2.3bn Net income, €3.2bn including €895m additional net capital
gain from Setefi and ISP Card disposal to be booked in 4Q16 Growth in Net interest income in Q3 (+2% vs 2Q16) Continued effective cost management with C/I ratio at 49.9%
Best-in-class capital position with a solid balance sheet: Decreasing NPL stock (~-€5bn vs 9M15), the lowest of the past ten
quarters, coupled with the lowest NPL inflow since ISP was created Increased NPL coverage to 48% (+1pp vs 9M15) Pro-forma fully loaded Common Equity ratio at 13.0%(1) well above
SREP + SIB requirements even under EBA stress test adverse scenario
Low leverage ratio at 6.7% Strong liquidity position and funding capability with LCR and NSFR
well above 100%
4
Contents
Well ahead of our Business Plan
9M16: Solid performance
Best-in-class capital position and leverage with a solid balance sheet
5
Oth
er
char
ges/
gain
s(4)
Taxe
s
Prof
its o
n tra
ding
9M16: €3.2bn Pro-forma Net Income9M16 P&L€ m
Net
inte
rest
in
com
e
Net
fees
and
co
mm
issi
ons
Oth
er(3
)
Ope
ratin
g in
com
e
Pers
onne
l
Adm
in.
Dep
reci
atio
n
Loan
loss
pr
ovis
ions
Pre-
tax
inco
me
Net
inco
me
Ope
ratin
g m
argi
n
Oth
er(5
)
Insu
ranc
e in
com
e
829943
(1,001)
(206)
3,5422,3355,545
(541)
(2,534)
12,664
5,269
(270)
(1,858)
78
6,346
(3,919)
~€170m profit from disposal of Visa Europe stake €263m charges for the Resolution Fund(1) and the
Deposit Guarantee Scheme(2)
(1) €148m pre-tax in Other operating income (expenses) and €103m net of taxes; our commitment for the year fully funded(2) €115m pre-tax in Other operating income (expenses) and €79m net of taxes; our commitment for the year fully funded(3) Profit (Losses) on investments carried at equity and other operating income (expenses)(4) Net impairment losses on assets, Profits (Losses) on HTM and on other investments, Provisions for risks and charges(5) Income (Loss) after tax from discontinued operations, Minority interests, Intangible amortization (after tax), Charges for integration and personnel exit incentives (after tax)Note: figures may not add up exactly due to rounding differences
(4) (4) (3) (5) 3 (4) 2 (9) 6 (15) (18) (32) 104 (14)(54)(4)Δ% vs9M15
Very conservative provisioning also in light of profits from disposal of non-core assets
~3,200
Pro-
form
a N
et In
com
e in
cl. S
etef
i and
IS
P C
ard
gain
6
Oth
er
char
ges/
gain
s(3)
Taxe
s
Prof
its o
n tra
ding
3Q16: Solid Operating Performance with Very Conservative Provisioning3Q16 P&L€ m
Net
inte
rest
in
com
e
Net
fees
and
co
mm
issi
ons
Oth
er(2
)
Ope
ratin
g in
com
e
Pers
onne
l
Adm
in.
Dep
reci
atio
n
Loan
loss
pr
ovis
ions
Pre-
tax
inco
me
Net
inco
me
Ope
ratin
g m
argi
n
Oth
er(4
)
Insu
ranc
e in
com
e
628941
258248
(278) (35)
(74)
(917)
1,745
(61)1,859
(1,306)
1,919(625)
(186)
4,036
(1) €103m pre-tax in Other operating income (expenses) and €69m net of taxes; our commitment for the year fully funded(2) Profit (Losses) on investments carried at equity and other operating income (expenses)(3) Net impairment losses on assets, Profits (Losses) on HTM and on other investments, Provisions for risks and charges(4) Income (Loss) after tax from discontinued operations, Minority interests, Intangible amortization (after tax), Charges for integration and personnel exit incentives (after tax)Note: figures may not add up exactly due to rounding differences
(1) (0) n.m. (2) 5 (1) 4 (7) 19 (72) (13) (18) 106 (13)n.m.7Δ% vs 3Q15
€103m charges for the Deposit Guarantee Scheme(1)
Very conservative provisioning also in light of profits from disposal of non-core assets
~€700m excluding charges for the Deposit Guarantee Scheme(1)
7
+2% vs 2Q16 +6% excluding charges for the Deposit Guarantee Scheme booked in 3Q16 and positive contribution from a claim booked in 3Q15
Yearly comparison
Net Interest Income, 9M16 vs 9M15€ m
Interest rates at all-time lows Increase in deposits
Net Interest Income Still Affected by All-Time Low Interest Rates; Showing Growth in Q3
Quarterly comparison
Net Interest Income, 3Q16 vs 2Q16€ m
62315
Fina
ncia
lco
mpo
nent
s
(17)
2Q16
Net
in
tere
st in
com
e
Spre
ad
3Q16
Net
inte
rest
inco
me
Hed
ging
(1)(2
)
Volu
mes
1,8591,831 102
Fina
ncia
lco
mpo
nent
s
9M16
Net
inte
rest
inco
me
5,545
Hed
ging
(1)(2
)
9M15
Net
in
tere
st in
com
e
(112)
Volu
mes
5,791(85)
Spre
ad
(151)
(1) ~€480m benefit from hedging in 9M16, of which ~€150m in 3Q16(2) Hedging on core depositsNote: figures may not add up exactly due to rounding differences 8
Well-balanced and Resilient Business Model
42413937
30
43: Business Plan target for 2017
+12pp
9M12 9M159M14 9M169M13
Contribution of Net fees and commissions to Operating income
%
9
1,745
3Q163Q15
1,74827
1,721
+1%
Quarterly comparison Yearly comparison
Net fees and commissions€ m
5,2695,464
9M15 9M16
-1%117
5,347
Net fees and commissions€ m
A Good Quarter for Commissions
Performance feesPerformance fees
10
Assets under Management AuM / Indirect Deposits(1)
€69bn of Net inflows into AuM since 31.12.13: Business Plan target for 2017 already achieved
€155bn of AuA, increasing Direct deposits and relatively low market penetration of Wealth Management products support further sustainable growth
€8bn Growth in Assets Under Management in Q3 with Further Upside Going Forward
%€ bn
309301303282
243 +27%
31.12.13 31.12.15 30.9.1630.6.1631.12.14
(1) Sum of Assets under Management (AuM) and Assets under Administration (AuA) 11
67656359 +8pp
31.12.14 30.9.1631.12.1531.12.13
+€8bn in 3Q16
Operating costs
Total Operating costs
Administrative costs
Personnel costsf(x)
€ m
Best-in-class Cost/Income at 49.9% ISP maintains high strategic flexibility in managing
costs and remains a Cost/Income leader
+1%6,318
9M15
6,264
9M16
-4%1,858
9M169M15
1,929
3,807
9M15
3,919+3%
9M16
Effective Cost Management
12
Top-tier Cost/Income Ratio in EuropeCost/Income(1)
%
64.667.766.6
54.951.5
58.5
51.8
78.8
65.365.0
49.9
81.681.0
91.9
51.447.5 48.7
66.9
(1) Sample: Barclays, BBVA, BNP Paribas, Credit Suisse, Deutsche Bank, ING, Lloyds Banking Group, Nordea, Santander, Société Générale, Standard Chartered and UBS (30.9.16 data); BPCE, Commerzbank, Crédit Agricole SA, HSBC and UniCredit (30.6.16 data)
13
Peer average: ~64%
ISP Peer
3
Peer
4
Peer
5
Peer
6
Peer
7
Peer
8
Peer
9
Peer
10
Peer
11
Peer
12
Peer
13
Peer
14
Peer
15
Peer
16
Peer
17
Peer
2
Peer
1
Accelerated Trend of Decline in NPL Stock
30.9.16
59.7
31.0
30.6.16
63.1
31.12.15
61.3
32.433.1
62.6
30.9.15
34.2
31.3.16
33.1
64.5
Gross NPL / Gross Loans to Customers, %x
Net NPL / Net Loans to Customers, %x
17.2 16.6 16.0
10.0 9.5 9.2
15.7
9.0
15.1
8.5
€ bn
NPL stock
14
Lowest NPL stock level of the past 10 quarters
Gross quarterly NPL inflow(1) from performing loansGross NPL inflow(1) from performing loans
Strong Decline in NPL Inflows
(1) Inflow to NPL (Bad Loans, Unlikely to Pay and Past Due) from performing loans(2) Inflow to NPL (Bad Loans, Unlikely to Pay and Past Due) from performing loans minus outflow from NPL into performing loans
€ bn Net inflow(2)
Lowest inflow of new NPL since ISP was created
€ m Net inflow(2)
154
871
-8%1,315
-37%
2Q16
1,5521,437
1Q16
2,082
3Q163Q15
1,1761,646
2.24.6
9M15
4.3
9M16
6.7
9.0
6.1
-60%
9M13 9M14
10.8
7.4
15
NPL Reduction: a Key Target for 2016 is Being Achieved
Dynamic NPL management
Proactive credit management fully rolled out(~300 dedicated resources)
Capital Light Bank fully operational (~700 dedicated resources)
New workout processes, products and policies
Integrated management of NPLs in place (~500 dedicated resources)
ISP delivered substantial deleveraging…Gross NPL stock, € bn
…maintaining prudent coverage…
…and stable cost of risk…
…without impacting the ability to remunerate shareholders
NPL cash coverage ratio, %
Cost of risk, bps
€ bn
64.559.7 ~-€5bn
30.9.1630.9.15
+1pp
30.9.16
48.047.0
30.9.15
93
30.9.1630.9.15
93
9M16 Net income + Setefi/ISP Card net capital gain
2016 dividend commitment
>100%
Very conservative provisioning also in light of profits from disposal of non-core assets
16
3.03.2
stable
(1) Excluding personal guarantees(2) Sample: BPOP, UBI and UniCredit data as of 30.6.16; MPS data as of 30.9.16
Very Conservative Provisioning Coupled with Increased NPL Coverage
€ m %
847 923
694767
917769
Q1
Q2
Q3
9M169M15
2,5342,383 47.0 ~43%
average of Italian peers(2)
30.9.16
48.0
30.9.15
140
Total coverage (including collateral)(1), %
x
147
NPL cash coverage ratioLoan Loss Provisions
Very conservative provisioning also in light of profits from disposal of non-core assets
17
99
48
Total NPL coverage ratio
147(2)
Collateral(1)NPL cash coverage ratio
Very Strong NPL Coverage when Considering Collateral
Total NPL coverage (including collateral(1)) Total NPL coverage (including collateral(1))breakdown
30.9.16%
61% 87% 148%
Bad loanscoverage ratio%
30.9.16%
NPL cash coverage ratio Collateral(1)
1.4%
1.1%
4.9%
2.1%
2.2%
2.2%
8.5%
(1) Excluding personal guarantees(2) 155% including personal guarantees(3) Parent Bank and Italian Subsidiary Banks(4) Mediocredito Italiano (Industrial Credit, Factoring and Leasing) and Banca IMI (Capital Markets and Investment Banking)Note: figures may not add up exactly due to rounding differences
Incidence on Group Total Loans (net values)
Total
46
57
222
126
69
31
46
50
42
92
89
Int’l SubsidiaryBanks and ProductCompanies(4)
Of which RE& Construction
Companies(3) 139
Of which SMEs
Of which residentialmortgages
126
151Households(3)
172
193
138
254
18
9M16, %
ISP: Evolving into a Successful Wealth Management Company
Corporate and Investment Banking
International Subsidiaries
Wealth Management(2)
~50%
~10%
~15%
~27%
~6%
~15%
~13%
~14%
Private Banking
Insurance
AM(3)
Pre-tax Income breakdown(1)
Banca dei Territori~24%
(1) Excluding Corporate Centre(2) Private Banking includes Fideuram, Intesa Sanpaolo Private Banking, Intesa Sanpaolo Private Bank (Suisse) and Sirefid; Insurance includes Fideuram Vita, Intesa Sanpaolo Assicura and Intesa Sanpaolo Vita; Asset
Management includes Eurizon Capital; BdT WM includes ~€1.3bn revenues from WM products included in Banca dei Territori (applying a C/I of ~37%)(3) Asset Management(4) Banca dei Territori Wealth ManagementNote: figures may not add up exactly due to rounding differences
BdTWM(4)
19
Contents
Well ahead of our Business Plan
9M16: Solid performance
Best-in-class capital position and leverage with a solid balance sheet
20
Solid Capital Base, Well Ahead of Regulatory Requirements
(1) Pro-forma fully loaded Basel 3 (30.9.16 financial statements considering the total absorption of DTA related to goodwill realignment/adjustments to loans and the expected absorption of DTA on losses carriedforward); including estimated benefits from the Danish Compromise (14bps)
(2) Calculated as the difference between the Fully Loaded Common Equity ratio vs SREP and SIB requirements; only top European banks that have communicated their SREP requirement(3) Sample: BBVA, BNP Paribas, Deutsche Bank, ING, Nordea, Santander and Société Générale as of 30.09.16; BPCE, Commerzbank, Crédit Agricole Group and UniCredit as of 30.06.16; Data may not be fully
comparable due to different estimates hypothesis. Source: Investors' Presentations, Press Releases, Conference Calls(4) Sample: BBVA, BNP Paribas, BPCE, Commerzbank, Crédit Agricole Group, Deutsche Bank, ING, Nordea, Santander, Société Générale and UniCredit
ISP CET1 Ratios vs SREP + SIB requirements
30.9.16, %
Fully Loaded CET1 Ratio Buffer vs SREP + SIB requirements(2) (3)
30.9.16, Bps
ISP Phased-in CET1 Ratio
12.8
ISP 2016 require-mentsSREP + SIB
9.5
~+350bps
13.0 ~350
~90
~+260bps
Peer averagebuffer vs SREP + SIB requirements
ISP buffer vs SREP + SIB requirements
21
Best-in-class leverage ratio: 6.7%
Fully Loaded CET1 Ratio 2018 buffer in EBA stress test adverse scenario vs SREP + SIB requirements(4)
2018, Bps
(264)
71
ISP buffer vs SREP + SIB requirements in adverse scenario
+335bps
ISP is the clear winner of the EBA Stress Test; the only bank above SREP + SIB requirements even in the adverse scenario
Peer average buffer vs SREP + SIB requirements in adverse scenario
ISP Fully Loaded(1)
CET1 Ratio
Best-in-Class Excess CapitalFully Loaded CET1 Ratio Buffer vs SREP + SIB requirements(1)(2)
Bps
(~70)
~+260bps
(~20)
Peeraverage:~90
(~10)(~0)
~60~30
~90~100
~370
~300
~100
~350
Fully Loaded CET1Ratio(1), %
14.2 11.4 17.9 10.5 11.511.4 11.613.513.5 11.1
(1) Sample: BBVA, BNP Paribas, Deutsche Bank, ING, Nordea, Santander and Société Générale as of 30.09.16; BPCE, Commerzbank, Crédit Agricole Group and UniCredit as of 30.06.16; Data may not be fully comparable due to different estimates hypothesis. Source: Investors' Presentations, Press Releases, Conference Calls
(2) Calculated as the difference between the Fully Loaded Common Equity ratio vs SREP + SIB requirements; only top European banks that have communicated their SREP requirement(3) Pro-forma fully loaded Basel 3 (30.9.16 financial statements considering the total absorption of DTA related to goodwill realignment/adjustments to loans and the expected absorption of DTA on losses carried
forward); including estimated benefits from the Danish Compromise (14bps)
13.0(3)
22
11.0
Peer
3
Peer
4
Peer
5
Peer
6
Peer
7
Peer
8
Peer
9
Peer
10
Peer
11
Peer
2
Peer
1
ISP
Best-in-Class Leverage Ratio
Fully loaded Basel 3 pro-forma Leverage ratio(1)
%
4.1
4.84.4 4.24.34.4
6.6
4.03.6
4.44.64.85.1
6.4
4.6
5.6
5.0
(1) Sample: Barclays, BBVA, BNP Paribas, Credit Suisse, Deutsche Bank, ING, Lloyds Bkg Group, Nordea, Santander, Société Générale, Standard Chartered and UBS (30.09.2016 pro-forma data); BPCE, Commerzbank, HSBC and UniCredit (30.06.2016 pro-forma data); Data may not be fully comparable due to different estimates hypothesis. UBS Leverage ratio calculated on the basis of fully applied Swiss SRBrules. Source: Investors' Presentations, Press Releases, Conference Calls
Phased-in 6.7%
23
Peer
3
Peer
4
Peer
5
Peer
6
Peer
7
Peer
8
Peer
9
Peer
10
Peer
11
Peer
12
Peer
13
Peer
14
Peer
15
Peer
16
Peer
2
Peer
1
ISP
Liquid assets(1)
Strong Liquidity Position Confirmed
(1) Stock of own-account eligible assets (including assets used as collateral and excluding eligible assets received as collateral) and cash & deposits with Central Banks(2) Eligible assets freely available (excluding assets used as collateral and including eligible assets received as collateral), net of haircuts; including cash & deposits with Central Banks
30.9.16, € bn
LCR and NSFR already well above Basel 3 requirements for 2018 ~€41bn taken under TLTRO II against a full pay-back of the €27.6bn
that the Group borrowed under TLTRO I
LCR and NSFR
%
Unencumbered eligible assets with Central Banks(2)
Liquidassets(1)
Other liquid assets
76
51
127
>100
30.9.16
>100
31.12.15
24
Contents
Well ahead of our Business Plan
9M16: Solid performance
Best-in-class capital position and leverage with a solid balance sheet
25
Well Ahead of Our Business Plan
2014 dividend commitment: €1bn (Over) Delivered
2015 dividend commitment: €2bn (Over) Delivered
€3.2bn pro-forma 9M Net income including €895m additional net capital gain from Setefi and ISP Card disposal to be booked in Q4
2016 dividend commitment: €3bn
Dividends
26
Our Business Plan Initiatives: New Growth Bank (1/2)Key highlights on New Growth Bank initiatives
Banca 5®▪ Banca 5® “specialised” business model introduced in ~70% of the branches, with 3,600
dedicated Relationship Managers: revenues per client increased from €70 to €112▪ “Real Estate” project underway with 29 real estate agencies already opened
Private Banking Hub
▪ Fideuram-ISPB successfully operational as of July 1st, 2015▪ PB branch in London fully up and running and strengthening of ISPB Suisse▪ Launched first wave of new products for the entire Division (e.g., Fideuram Private Mix) ▪ Opened 5 dedicated HNWI boutiques with targeted service model for HNWI clientele▪ Launch of advisory tool “View” on the ISPB network with more than €3bn of assets under
advisory▪ Roll out of new digital office for private bankers
▪ New multichannel processes successfully launched:– 1.3m additional multichannel clients since the beginning of 2014, raising the total to
~5.8m clients – 3.7m mobile Apps for smartphone/tablet downloaded by customers– The first multichannel bank in Italy with ~80% of products available via multichannel
platforms– Digitisation across all branches with ~100% paperless transactions for all priority
products (~6.4m transactions completed)– Online Branch fully active for “Service To Sale”, with ~18,000 products sold in the first 9
months of 2016– New digital marketing capabilities built to fully exploit search engines and social media
presence– Launch of new Intesa Sanpaolo digital experience, with new internet banking site, new
website and new Apps
Multichannel Bank
27
Our Business Plan Initiatives: New Growth Bank (2/2)
Key highlights on New Growth Bank initiatives
Asset Management Hub
▪ Digital platform enriched (e.g., “model portfolio”, “scenario analysis” added)▪ New product range introduced into Banca dei Territori, the Private Banking Division, and the Insurance Hub
and new offer dedicated to international clients (e.g., “Best expertise”) and to SMEs (e.g., GP Unica Imprese)▪ Product range enhanced with moderate risk profile solutions aimed at responding to current market volatility
(e.g., Epsilon Difesa Attiva)▪ Launch of products allowing investors to sustain the real economy while capturing the evolution of the European
structured credit market (Eurizon Easy Fund – Securitised Bond Fund)▪ Asset Management Division growing in Europe (e.g., partnership in London, ongoing authorisation processes for
Eurizon Capital in Frankfurt and Paris) and Asia (e.g., ongoing authorisation process for Eurizon Capital Hong Kong and set up of new WM company in China)
Insurance Hub▪ Steering of product mix towards capital-efficient products making good progress (e.g., Unit Linked at 64% of
new production vs 57% in 2015)▪ Launch of new Unit Linked Product with capital protection (“Exclusive Insurance”)▪ Expansion of life-business products with the launch of "Base Sicura Tutelati", designed for underage clients and
those with disabilities, and "Vicino a Te" for minors who lost parents in the earthquake▪ Consolidation of products (Fideuram Private Mix and Synthesis) and launch of new composite product for
HNWI within the Private Banking Division▪ Restyling of product “Giusto Mix” with introduction of a volatility reduction tool ▪ Continuation of offer diversification in P&C business with products in the health-care sector (new product
dedicated to surgery, prevention and illnesses with "Dread Disease") in the corporate sector (new product dedicated to agriculture)
▪ Completion of activities for the development of Pension Funds dedicated to company employees▪ Full integration of Pension Fund Business▪ Launch of a new system which targets new customers based on the registration of license plates
Bank 360°for corporate clients
▪ New Transaction Banking Group unit set up and new commercial initiatives ongoing▪ New commercial model and product offering for SMEs ▪ Specialised finance hub – new Mediocredito Italiano – fully up and running▪ Strengthening of the international presence of C&IB Division (e.g., office set up in Washington, strengthening of
ISP Bank Luxembourg)
28
Key highlights on Core Growth Bank initiatives
Dynamic Credit and Risk Management
▪ Proactive credit management value chain empowered across all Divisions ▪ Integrated management of NPLs(1) in place▪ New organisation of CLO area, structured by Business Unit▪ Split of Risk and Compliance, with two Chiefs (CRO and CCO) reporting directly to the CEO
Continuous Cost Management
▪ Geographical footprint simplification ongoing: 104 branches closed since the beginning of 2016 and 669 since 2014
▪ Legal entity simplification ongoing: from 7 to 1 product factories in specialised finance and advisory, leasing and factoring and 9 local banks merged into ISP
Capturing Untapped Revenue Potential
▪ Project “cash desk service evolution” in progress: already ~2,000 branches with cash desks closing at 1pmand ~250 branches fully dedicated to advisory services
▪ New e-commerce portal to continue seizing business potential after EXPO 2015▪ Offer aimed at growth in lending to private sector reinforced (e.g., new “Mutuo Giovani”)▪ New Service Model introduced at Banca dei Territori: introduction of three specialised commercial value chains,
creation of ~1,200 new managerial roles, innovation of the SME Service Model▪ New advanced analytics / machine learning models to identify high potential clients▪ Launch of the “Programma Filiere” with important initiatives in relevant economic sectors (Agriculture)▪ Integration of consumer finance in branch network▪ C&IB Asset Light model fully operational, with benefits in terms of cross selling; distribution capabilities
eventually being enhanced▪ Front-line excellence programme in C&IB ongoing▪ New C&IB organisation in place to reinforce the "industry driven" client service model and the international growth▪ New segmentation and service model for International Subsidiaries Affluent clients launched▪ Banca IMI international strategy being implemented, with focus on core selected products▪ JV in merchant banking with specialised investor (Neuberger) completed, with deconsolidation of activities
Our Business Plan Initiatives: Core Growth Bank
(1) Excluding Bad loans (managed within the Capital Light Bank) 29
Our Business Plan Initiatives: Capital Light Bank, People Initiatives and Investments
(1) Real Estate Owned Company
Key highlights on Capital Light Bank and People initiatives and investments
People and investments askey enablers
▪ ~4,500 people already reallocated to high priority initiatives▪ Investment Plan for Group employees finalised: plan with the highest number of
participants in Group history▪ “Big Financial Data” programme fully in line with our targets (~500 employees involved)▪ Chief Innovation Officer established in role and “Innovation Centre” created to train
staff and develop new products, processes and “ideal branches”, located in the new ISP Tower in Turin
▪ Large-scale digitisation programme launched to improve efficiency and service level on top priority operating processes; Digital Factory fully operational, digitisation of 11 key processes launched, 6 already up and running
▪ Advanced Analytics programme launched on commercial/operating initiatives in several business / governance units
▪ Investment to renew the layout of 1,000 branches already activated (~60 branches converted up to now)
▪ More than 180 agreements with labour unions signed▪ More than 5,000 employees have already adopted “smart working”▪ Launched an “Integrated Welfare Programme”
Capital Light Bank (CLB)
▪ CLB fully operational with:– ~720 dedicated people– ~€18bn of deleveraging of non-core assets already achieved
▪ New performance management system fully operational for each asset class▪ Re.O.Co.(1) fully up and running with an estimated positive impact for the Group of
€45m since 2014▪ Partnership with KKR-Pillarstone up and running
30
Over-Delivery on Our Business Plan Commitments Thanks to the Contributions of All Our People
…thanks to the contributions of all our people…
Strong delivery on Group Business Plan targets…
…and a Business Plan for each individual to deliver
My B.Plan
My B.Plan
My B.Plan
31
Macro outlook
Employment increased by ~162,000 people YoY in August 2016. From May to August, the employment rate was at the highest level since 2009
Household real disposable income expected to rise by 2.1% in 2016 (vs ~1% average growth in pre-crisis 2000-07)
New car registrations rose by 18% in the first 9 months of 2016 (highest level since 1997)
Lending volumes to the private sector at a four-year peak (+0.7% YoY in August 2016; +39% YoY for residential mortgages in the first 8 months of 2016)
+23% YoY growth in 2Q16 for residential real estate transactions. Business confidence rising among construction companies
Government reforms for growth already delivering a positive impact with further reforms in the pipeline capable of raising GDP by more than 2pp in five years on top of expected growth
Macroeconomic Outlook: The Recovery Continues
Italian GDP projected to grow by ~1% in both 2016 and 2017
Note: ISTAT and Intesa Sanpaolo estimates on GDP 32
9M: Solid Performance
€2.3bn Net income
(1) Including €895m additional net capital gain from Setefi and ISP Card disposal to be booked in Q4(2) Pro-forma fully loaded Basel 3 (30.9.16 financial statements considering the total absorption of DTA related to goodwill realignment/adjustments to loans and the expected absorption of DTA on losses carried
forward); including estimated benefits from the Danish Compromise (14bps)
Common Equity(2) ratio at 13.0% well above SREP + SIB requirements even under EBA stress test adverse scenario
Cost/Income ratio at 49.9%, among the best in Europe
33
€3.2bn pro-forma(1) Net income already covering full dividend commitment for the year
€3bn cash dividend commitment confirmed
Declining NPL stock (~-€5bn in one year) driven by the lowest NPL inflow since ISP was created, coupled with increased NPL coverage
November 4, 2016
9M16 Results
Detailed Information
MIL-BVA327-15051trim.13-90141/LR
- Assets under Administration
Key P&L and Balance Sheet Figures
35
€ m
Note: figures may not add up exactly due to rounding differences(1) Including charges for the Resolution Fund: €148m pre-tax (€103m net of taxes) booked in Other operating income (expenses) and charges for Deposit Guarantee Scheme: €115m pre-tax
(€79m net of taxes) booked in Other operating income (expenses); our commitment for the year fully funded(2) Net of duplications between Direct Deposits and Indirect Customer Deposits
Operating income
Cost/Income ratio 49.9%
9M16
Pre-tax income 3,542(1)
Operating margin
Net income 2,335(1)
Operating costs (6,318)
Loans to Customers 364,836
30.9.16
Customer Financial Assets(2) 844,860
of which Direct Deposits from Banking Business 379,620
of which Direct Deposits from InsuranceBusiness and Technical Reserves 143,063
of which Indirect Customer Deposits 463,920
- Assets under Management 309,408
154,512
RWA 286,006
12,664(1)
6,346(1)
+5% vs 31.12.15
36
Contents
Detailed Consolidated P&L Results
Divisional Results and Other Information
Liquidity, Funding and Capital Base
Asset Quality
MIL-BVA327-15051trim.13-90141/LR
37
9M15 9M16 %Restated
Net interest income 5,791 5,545 (4.2)Profits (losses) on investments carried at equity 95 188 97.9Net fee and commission income 5,464 5,269 (3.6)Profits (Losses) on trading 977 943 (3.5)Income from insurance business 866 829 (4.3)Other operating income 73 (110) n.m.
Operating income 13,266 12,664 (4.5)Personnel expenses (3,807) (3,919) 2.9Other administrative expenses (1,929) (1,858) (3.7)Adjustments to property, equipment and intangible assets (528) (541) 2.5
Operating costs (6,264) (6,318) 0.9Operating margin 7,002 6,346 (9.4)
Net provisions for risks and charges (344) (164) (52.3)Net adjustments to loans (2,383) (2,534) 6.3Net impairment losses on assets (60) (84) 40.0Profits (Losses) on HTM and on other investments 87 (22) n.m.
Income before tax from continuing operations 4,302 3,542 (17.7)Taxes on income from continuing operations (1,475) (1,001) (32.1)Charges (net of tax) for integration and exit incentives (46) (67) 45.7Effect of purchase cost allocation (net of tax) (86) (82) (4.7)Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m. Income (Loss) after tax from discontinued operations 44 44 0.0Minority interests (13) (101) 676.9
Net income 2,726 2,335 (14.3)
€ m
9M vs 9M: Net Income at €2.3bn, €3.2bn Pro-forma Including Setefi and ISP Card Capital Gain
€2,517m excluding charges for the RF/DGS(1)
Note: figures may not add up exactly due to rounding differences(1) Charges for the Resolution Fund: €148m pre-tax (€103m net of taxes) booked in Other operating income (expenses) and charges for Deposit Guarantee Scheme: €115m pre-tax (€79m
net of taxes) booked in Other operating income (expenses); our commitment for the year fully funded
MIL-BVA327-15051trim.13-90141/LR
€ m
38
Q3 vs Q2: Net Interest Income Growth2Q16 3Q16 %
Restated
Net interest income 1,831 1,859 1.5Profits (losses) on investments carried at equity 84 30 (64.3)Net fee and commission income 1,848 1,745 (5.6)Profits (Losses) on trading 467 248 (46.9)Income from insurance business 239 258 7.9Other operating income (expenses) 136 (104) n.m.
Operating income 4,605 4,036 (12.4)Personnel expenses (1,338) (1,306) (2.4)Other administrative expenses (638) (625) (2.0)Adjustments to property, equipment and intangible assets (178) (186) 4.5
Operating costs (2,154) (2,117) (1.7)Operating margin 2,451 1,919 (21.7)
Net provisions for risks and charges (97) (51) (47.4)Net adjustments to loans (923) (917) (0.7)Net impairment losses on other assets (36) (28) (22.2)Profits (Losses) on HTM and on other investments (35) 18 n.m.
Income before tax from continuing operations 1,360 941 (30.8)Taxes on income from continuing operations (340) (278) (18.2)Charges (net of tax) for integration and exit incentives (38) (16) (57.9)Effect of purchase cost allocation (net of tax) (27) (26) (3.7)Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m. Income (Loss) after tax from discontinued operations 15 16 6.7Minority interests (69) (9) (87.0)
Net income 901 628 (30.3)
Note: figures may not add up exactly due to rounding differences(1) €103m pre-tax (€69m net of taxes) booked in Other operating income (expenses)
€697m excluding charges for the Deposit Guarantee Scheme(1)
39
Net Interest Income: Quarterly Increase Despite All-Time Low Interest Rates
Yearly Analysis
€ m Euribor 1M; % Euribor 1M; %€ m
Quarterly Analysis
-0.37-0.35-0.09
2Q163Q15
1,887
3Q16
1,831 1,859
9M169M15
5,791
-0.33-0.05
5,545
Decrease due to active management of securities portfolio, a decline in market rates and lower contribution from core deposit hedging
2.6% growth in average Performing loans to customers, +3.3% excluding the Capital Light Bank
6.4% growth in average Direct deposits from banking business
% 3Q16 vs 3Q15 and 2Q16 % 9M16 vs 9M15
-1.5 +1.5 -4.2
1.5% increase vs 2Q16 Average Performing loans to customers up ~1% vs 2Q16 Average Direct deposits from banking business up 2% vs
2Q16
40
3Q16Volumes Spread Hedging(1)(2)2Q16
Net Interest Income: Quarterly Increase Mainly Due to Volumes and Spread
Quarterly Analysis Yearly Analysis
Note: figures may not add up exactly due to rounding differences(1) ~€480m benefit from hedging in 9M16, of which ~€150m in 3Q16(2) Hedging on core deposits
€ m € m
Financialcomponents
9M16Volumes Spread Hedging(1)(2)9M15 Financialcomponents
6 1,8591,831(17)
2315
5,545 (85)(151)
102
(112)
5,791
• Interest rates at all-time lows• Growth in short-term Direct deposits
from banking business
1.4% increase vs 3Q15 when excluding performance fees
Decrease vs 2Q16 mainly due to the usual seasonal business slowdown in summer
Net Fee and Commission Income: Increase vs 3Q15 when Excluding Performance Fees
41
Yearly Analysis
€ m € m
Quarterly Analysis
Decrease due to the difficult market environment in the first months of 2016 and the absence of performance fees booked in 9M15
Strong increase in commissions from Distribution of insurance products (+14%; +€124m)
% 9M16 vs 9M15
-0.2 -5.6 -3.6
Performance fees% 3Q16 vs 3Q15 and 2Q16
Performance fees
5,269
9M15
5,464
9M16
5,347
1171,848 1,745
1,721
1,748
3Q16
27
3Q15 2Q16
Profits on Trading: ~€1bn in 9M16
€ m
Quarterly Analysis Yearly Analysis
42Note: figures may not add up exactly due to rounding differences(1) Of which €121m Bank of Italy dividend
248467
13Q162Q163Q15
943977
9M15 9M16
Decrease vs 2Q16 largely due to the absence of the Bank of Italy dividend booked in the previous quarter and to the seasonal summer slowdown in customer driven activity
Positive 9M16 in part due to the increase in customer driven activity
€ m% 3Q16 vs 3Q15 and 2Q16 % 9M16 vs 9M15
n.m. -46.9 -3.5
Contributions by Activity
Customers
Capital markets & Financial assets AFS
Trading and Treasury
Structured credit products
3Q16
418
11
174
9M16
339
3Q15
50
(32)
(3)
(15)
130
6
15
96
571
(2)
130
9M15
277
2Q16
240
6
85
136
(1)
MIL-BVA327-15051trim.13-90141/LR
Operating Costs: Cost/Income Ratio at 49.9%
Quarterly Analysis
Personnel ExpensesOperating Costs
Other Administrative Expenses Adjustments€ m
Yearly Analysis
Personnel ExpensesOperating Costs
AdjustmentsOther Administrative Expenses€ m € m
€ m € m€ m€ m
€ m
3.7% decrease in Other Administrative Expenses
~1,200 headcount reduction
43
2% decrease in Other Administrative Expenses vs2Q16 and 1.1% vs 3Q15
~370 headcount reduction in Q3
3Q16
2,154 2,117
3Q15
2,059
2Q16
1,249
3Q16
1,306
2Q163Q15
1,338
9M169M15
6,3186,264
9M169M15
3,9193,807
625638632
3Q15 2Q16 3Q16 9M15 9M16
541528186178178
3Q15 3Q162Q16 9M16
1,858
9M15
1,929
% 3Q16 vs 3Q15 and 2Q16 % 9M16 vs 9M15
-1.7+2.8 -2.4+4.6 +0.9 +2.9
-2.0-1.1 +4.5+4.5 -3.7 +2.5
Very conservative provisioning in 2Q16 and 3Q16 also taking into account capital gains on the disposal of non-core assets
Fourth consecutive quarterly reduction in NPL stock, marking the lowest level of the past ten quarters
3Q16 saw the lowest quarterly inflow of NPL from Performing loans in ISP’s history
Non-performing loans cash coverage up to 48.0% (vs 47.3% in Q2)
Net Adjustments to Loans: Increased Coverage Coupled with Reduction in NPL Stock and Inflow
Yearly AnalysisQuarterly Analysis
44
9M16 saw the lowest inflow of NPL from Performing loans since ISP was created
Strong decline in inflow from Performing loans to Non-performing loans (-36% gross and -52% net)
Very conservative provisioning in 9M16 also taking into account capital gains on the disposal of non-core assets
Annualised cost of credit at 93bps, stable vs 9M15 Non-performing loans cash coverage up to 48.0% (vs
47.0% as of 30.9.15)
917923769
3Q15 2Q16 3Q16
2,534
9M169M15
2,383
€ m € m% 3Q16 vs 3Q15 and 2Q16 % 9M16 vs 9M15
+19.2 -0.7 +6.3
45
Contents
Detailed Consolidated P&L Results
Divisional Results and Other Information
Liquidity, Funding and Capital Base
Asset Quality
46
Customer Financial Assets(1)
€ bn
Direct Deposits from Banking Business
€ bn
Growth in Customer Financial Assets
Direct Deposits from Insurance Business and Technical Reserves
€ bn
Indirect Customer Deposits
€ bn
Note: figures may not add up exactly due to rounding differences(1) Net of duplications between Direct Deposits and Indirect Customer Deposits
% 30.9.16 vs 30.9.15, 31.12.15 and 30.6.16
Assets under Adm.Assets under Mgt.
€8bn increase in AuM in Q3
845841842814
30.9.1631.12.15 30.6.1630.9.15
380387372359
+€8bn
30.9.1630.6.1630.9.15 31.12.15
298 303 301 309166 151
30.6.16
468
30.9.1631.12.15
464452
30.9.15
155454156143140133127
30.9.15 30.6.16 30.9.1631.12.15
+3.8 +5.8 +2.0+0.3 +0.5 -1.8
+2.2+12.6 +7.6 -1.0+2.5 +2.5
MIL-BVA327-15051trim.13-90141/LR
Mutual Funds Mix
47
57%45% 47% 47%
53%53%55%43%
Equity, balanced and flexible funds
31.12.13
100100 100
Fixed income, monetary and other funds
31.12.15 30.9.16
+10pp
30.6.16
100%
Mutual funds mix
MIL-BVA327-15051trim.13-90141/LRStable and Reliable Source of Funding from Retail Branch Network
48
Wholesale Retail Total
Current accounts and deposits
Repos and securities lending
Senior bonds
Certificates of deposit + Commercial papers
Subordinated liabilities
Other deposits
Note: figures may not add up exactly due to rounding differences(1) ~30% placed with Private Banking clients(2) Including Certificates
27 73 100
Wholesale Retail
5
25
40
5
12
2
231
-
23(1)
2
2
17(2)
Retail funding represents 73% of Direct deposits from banking business
275
380
104 Covered bonds 13 -
EMTN puttable 2 -
€ bn as of 30.9.16; % Percentage of total
Breakdown of Direct Deposits from Banking Business
Placed with Private Banking clients
Strong Funding Capability: Broad Access to International Markets
Note: figures may not add up exactly due to rounding differences(1) Data as of 30.9.16
FY18FY17FY16
2016-2018 MLT Bond Maturities
11 14
1314
7
18
11
2824
Main Wholesale Issues
2015€ bn
RetailWholesale
€6.5bn of eurobonds (of which €2.25bn of covered bonds) and $1bn Additional Tier 1 placed. On average 80% demand from foreign investors; targets exceeded by 210%:
January: €1.25bn 5y senior unsecured eurobond issue and €1bn 7y covered bonds backed by residential mortgages
February: €1.5bn 7y senior unsecured eurobond issue
April: €500m 10y subordinated Tier 2 eurobond issue
June: €1bn 5y senior unsecured eurobond issue
September: $1bn Additional Tier 1 issue targeted at the U.S. and Canadian markets
December: €1.25bn 10y covered bonds backed by residential mortgages
2016
$1.5bn subordinated Tier 2, €1.25bn Additional Tier 1 and €1.25bn of covered bonds placed. On average 88% demand from foreign investors; targets exceeded by 168%:
January: $1.5bn subordinated Tier 2 issue targeted at the US and Canadian markets only and €1.25bn Additional Tier 1 issue targeted at international markets
March: €1.25bn 7y covered bonds backed by residential mortgages
49
~€11bn of bonds already placed, of which ~€7bn wholesale(1)
~€6bn of bonds expiring in Q4, of which ~€2bn wholesale(1)
50
High Liquidity: LCR and NSFR Well Above Basel 3 Requirements for 2018
TLTRO II: ~€41bn In June, the Group took ~€36bn under the first TLTRO II (maximum borrowing allowance
of ~€57bn) against a full pay-back of the €27.6bn that the Group borrowed under TLTRO I In September, the Group took ~€5bn under the second TLTRO II
Loan to Deposit ratio(3) at 96%
€ bn
Unencumbered eligible assets with Central Banks(2) (net of haircuts)
(1) Stock of own-account eligible assets (including assets used as collateral and excluding eligible assets received as collateral) and cash & deposits with Central Banks(2) Eligible assets freely available (excluding assets used as collateral and including eligible assets received as collateral) and cash & deposits with Central Banks(3) Loans to Customers/Direct Deposits from Banking Business
€ bn
Liquid assets(1)
116 127
30.9.16
130
30.9.15 30.6.16
69
30.9.15 30.9.1630.6.16
77 76
Solid Capital Base Confirmed by the EBA Stress Test
Phased-in Total Capital RatioPhased-in Common Equity Ratio Phased-in Tier 1 Ratio
After dividends(1)
%After dividends(1)
%After dividends(1)
%
Note: figures may not add up exactly due to rounding differences (1) After deduction of accrued dividends (~€2,250m), assumed equal to the Net income for the nine months minus accrued coupons on Additional Tier 1 issues(2) Pro-forma fully loaded Basel 3 (30.9.16 financial statements considering the total absorption of DTA related to goodwill realignment/adjustments to loans and the
expected absorption of DTA on losses carried forward); including estimated benefits from the Danish Compromise (14bps)51
13.0% pro-forma fully loaded Common Equity ratio(2)
6.7% leverage ratio
30.6.16
12.7 12.8
30.9.16 30.9.1630.6.16
14.113.9
30.6.16
16.9
30.9.16
17.2
52
Contents
Detailed Consolidated P&L Results
Divisional Results and Other Information
Liquidity, Funding and Capital Base
Asset Quality
53
%
Non-performing Loans: Sizeable and Increased Coverage
NPL cash coverage
Bad Loans recovery rate(3) at ~130% in the period 2009 - 30.9.16
Performing Loans cash coverage at 0.6%
(1) Excluding personal guarantees(2) Sample: BPOP, UBI and UniCredit (data as of 30.6.16); MPS (data as of 30.9.16)(3) Repayment on Bad Loans/Net book value
48.047.347.0
30.9.1630.9.15 30.6.16
Total coverage (including collateral(1))
147146140
~43%average ofItalianpeers(2)
MIL-BVA327-15051trim.13-90141/LR
Non-performing Loans: Cash Coverage Increased
54
48.047.347.0
30.9.1630.6.1630.9.15
26.224.723.2
30.6.16 30.9.1630.9.15
16.6
30.6.16 30.9.16
19.8
30.9.15
18.5
Total NPL(1)Cash coverage; %
Unlikely to Pay Past DueBad Loans
(1) Bad Loans (Sofferenze), Unlikely to pay (Inadempienze probabili) and Past Due (Scaduti e sconfinanti)(2) Excluding personal guarantees
62.8
30.6.16
60.7 60.5
30.9.1630.9.15
Total coverage (including collateral(2))
147146140
55
Net inflow of new NPL(1) from Performing LoansGross inflow of new NPL(1) from Performing Loans
(1) Bad Loans (Sofferenze), Unlikely to pay (Inadempienze probabili) and Past Due (Scaduti e sconfinanti)
Non-performing Loans: Lowest Gross Inflow of NPL from Performing Loans since ISP was Created (2007)
€ bn € bn
4.3
6.7
9.010.8
12.2
9M14 9M15
-65%
-36%
9M13 9M169M12
2.2
4.66.1
7.49.0
9M149M13
-76%
-52%
9M169M159M12
MIL-BVA327-15051trim.13-90141/LRNon-performing Loans: Lowest Quarterly Gross Inflow from Performing Loans since ISP was Created (2007)
56
€ bn
Gross inflow of new NPL(1) from Performing Loans
Note: figures may not add up exactly due to rounding differences(1) Bad Loans (Sofferenze), Unlikely to pay (Inadempienze probabili) and Past Due (Scaduti e sconfinanti)
Bad Loans Unlikely to Pay Past Due
0.12Q16
0.13Q16
0.13Q15
+2%
1.31.4
2.1
-8%
3Q162Q16
-37%
3Q15
3Q16
-40%0.6
3Q15 2Q16
1.00.60.8
3Q16
0.71.1 -36%
2Q163Q15
MIL-BVA327-15051trim.13-90141/LRNon-performing Loans: Lowest Quarterly Net Inflow from Performing Loans since ISP was Created (2007)
57
€ bn
Net inflow of new NPL(1) from Performing Loans
Note: figures may not add up exactly due to rounding differences(1) Bad Loans (Sofferenze), Unlikely to pay (Inadempienze probabili) and Past Due (Scaduti e sconfinanti)
Bad Loans Unlikely to Pay Past Due
0.2
0.9
1.6
2Q163Q15
-82%
3Q16
-91%
(0.3)
n.m.0.8 0.5 0.4 0.40.8 -45%
3Q15 2Q16 3Q163Q15 2Q16 3Q163Q15 2Q16 3Q16
0.1 0.00.0-78%
MIL-BVA327-15051trim.13-90141/LR
New Bad Loans: Strong Decrease in Gross Inflow
58
Note: figures may not add up exactly due to rounding differences (1) Sofferenze(2) Industrial Credit, Factoring and Leasing(3) Capital Markets and Investment Banking
Group’s new Bad Loans(1) gross inflow € bn
BdT’s new Bad Loans(1) gross inflow
Total
Mediocredito Italiano(2)
Households
SMEs
C&IB’s new Bad Loans(1) gross inflow
Total
Banca IMI(3)
Corporate and Public FinanceInternational Network & Global IndustriesFinancial Institutions
BdT
C&IBInternationalSubsidiaries
3Q16
-
-
-
-
-
3Q16
0.7
0.1
0.2
0.4
0.9 1.2
1.10.9
2Q16 3Q16
-18%
1.4
0.1
3Q15
0.7
0.2
0.1
0.2
3Q15
0.9
0.2
0.2
0.5
3Q15
-
-
-
-
-
2Q16
1.2
0.3
0.3
0.6
2Q16
0.1
-
-
-
-
MIL-BVA327-15051trim.13-90141/LR
New Unlikely to Pay: Strong Decrease in Gross Inflow
59
C&IB’s gross inflow of new Unlikely to PayBdT’s gross inflow of new Unlikely to Pay
Note: figures may not add up exactly due to rounding differences(1) Industrial Credit, Factoring and Leasing(2) Capital Markets and Investment Banking
Group’s gross inflow of new Unlikely to Pay€ bn
BdT
C&IB
Total
Mediocredito Italiano(1)
Households
SMEs
InternationalSubsidiaries
Total
Banca IMI(2)
Corporate and Public FinanceInternational Network & Global IndustriesFinancial Institutions
1.0
0.2
0.2
0.6
3Q16 3Q16
-
-
-
-
-
3Q15
1.2 1.0
0.31.40.1
3Q15
1.6
-39%
0.2
3Q16
0.1
2Q16
1.2
2.0
1.6
0.3
0.4
0.9
3Q15
0.3
0.1
-
0.2
-
1.2
0.3
0.3
0.7
2Q16 2Q16
-
-
-
-
-
Non-performing Loans: Fourth Consecutive Quarterly Decline in Stock, Marking the Lowest Level of the Past Ten Quarters
60
€ m
Gross NPL
Total
Past Due
Bad Loans
- of which forborne
64,477
1,358
24,151
38,968
237
- of which forborne
- of which forborne 9,285
Unlikely to pay
€ m
Net NPL
Total
Past Due
Bad Loans
- of which forborne
34,176
1,133
18,559
14,484
207
- of which forborne 590
- of which forborne 7,321Unlikely to pay
1,344
30.9.15 30.9.15
-7% -9%
30.9.16
31,044
550
15,480
15,014
81
1,002
6,995
30.9.16
686
20,981
38,028
96
9,196
2,220
30.6.16
61,340
777
21,993
38,570
129
9,463
2,050
30.6.16
32,352
633
16,560
15,159
113
934
7,220
59,695
~€5bn decrease in Gross NPL stock in one year
MIL-BVA327-15051trim.13-90141/LR
Loans to Customers: Well-Diversified Portfolio
61
Breakdown by economic business sector
Low risk profile of residential mortgage portfolio Instalment/available income ratio at 34% Average Loan-to-Value equal to 54% Original average maturity equal to ~22 years Residual average life equal to ~18 years
Note: figures may not add up exactly due to rounding differences
Breakdown by business area(Data as of 30.9.16)
15%
ConsumerFinance
5%
RE & Construction
7% Residential Mortgages
20%
Other5%
Foreign banks8%
Repos and Capital markets
11%Industrial credit,
Leasing, Factoring12%
SMEs
Global Ind. and GlobalTransaction Banking
8%
Mid Corporate andPublic Finance
9%
30.9.16Loans of the Italian banks and companies of the Group
Households 23.4% 23.4% Public Administration 4.9% 4.9% Financial companies 6.4% 7.6% Non-financial companies 36.2% 35.7% of which:
SERVICES 5.9% 5.9% DISTRIBUTION 6.0% 5.8% REAL ESTATE 4.4% 4.2% UTILITIES 3.4% 3.0% CONSTRUCTION 2.7% 2.6% METALS AND METAL PRODUCTS 1.9% 1.9% AGRICULTURE 1.7% 1.6% TRANSPORT 1.4% 1.6% FOOD AND DRINK 1.4% 1.4% MECHANICAL 1.2% 1.1% INTERMEDIATE INDUSTRIAL PRODUCTS 1.1% 1.1% FASHION 0.9% 0.9% ELECTROTECHNICAL AND ELECTRONIC 0.6% 0.6% TRANSPORTATION MEANS 0.5% 0.5% ENERGY AND EXTRACTION 0.4% 0.5% HOLDING AND OTHER 0.5% 0.5% INFRASTRUCTURE 0.4% 0.4% BASE AND INTERMEDIATE CHEMICALS 0.4% 0.4% PUBLISHING AND PRINTING 0.4% 0.4% MATERIALS FOR CONSTRUCTION 0.4% 0.3% FURNITURE 0.2% 0.2% PHARMACEUTICAL 0.2% 0.2% OTHER CONSUMPTION GOODS 0.2% 0.2% MASS CONSUMPTION GOODS 0.1% 0.1% WHITE GOODS 0.1% 0.1% NON-CLASSIFIED UNITS 0.0% 0.0%
Rest of the world 11.1% 11.0%Loans of the foreign banks and companies of the Group 8.9% 9.0%Non-performing loans 9.0% 8.5%TOTAL 100.0% 100.0%
30.6.16
62
Contents
Detailed Consolidated P&L Results
Divisional Results and Other Information
Liquidity, Funding and Capital Base
Asset Quality
MIL-BVA327-15051trim.13-90141/LR
Divisional Financial Highlights
63
Data as of 30.9.16
Note: figures may not add up exactly due to rounding differences(1) Excluding the Ukrainian subsidiary Pravex-Bank and the Hungarian “bad bank” which are included in the Capital Light Bank(2) Fideuram, Intesa Sanpaolo Private Bank (Suisse), Intesa Sanpaolo Private Banking and Sirefid(3) Eurizon Capital(4) Fideuram Vita, Intesa Sanpaolo Assicura and Intesa Sanpaolo Vita (5) Treasury Department, Central Structures, Capital Light Bank and consolidation adjustments
Divisions
Operating Income (€ m) 6,555 2,390 1,596 1,290 468 970 (605) 12,664
Operating Margin (€ m) 2,928 1,707 878 899 371 855 (1,292) 6,346
Net Income (€ m) 854 1,055 578 529 282 560 (1,523) 2,335
Cost/Income (%) 55.3 28.6 45.0 30.3 20.7 11.9 n.m. 49.9
RWA (€ bn) 85.8 97.5 31.8 9.4 1.0 0.0 60.6 286.0
Direct Deposits from Banking Business (€ bn) 166.7 109.2 34.0 23.8 0.0 0.2 45.6 379.6
Loans to Customers (€ bn) 186.5 97.6 26.9 9.3 0.3 0.0 44.2 364.8
Banca dei Territori
Asset Management(3)
Corporate & Investment
Banking
International Subsidiary
Banks(1)
Corporate Centre / Others
TotalInsurance(4)(5)
Private Banking(2)
MIL-BVA327-15051trim.13-90141/LR
Banca dei Territori: 9M vs 9M
64Note: figures may not add up exactly due to rounding differences
€ m9M15 9M16 %
RestatedNet interest income 3,666 3,476 (5.2)Profits (losses) on investments carried at equity 0 0 n.m. Net fee and commission income 3,046 2,904 (4.7)Profits (Losses) on trading 49 48 (2.0)Income from insurance business 0 0 n.m. Other operating income (expenses) 15 127 746.7
Operating income 6,776 6,555 (3.3)Personnel expenses (2,208) (2,257) 2.2Other administrative expenses (1,406) (1,369) (2.6)Adjustments to property, equipment and intangible assets (1) (1) 0.0
Operating costs (3,615) (3,627) 0.3Operating margin 3,161 2,928 (7.4)
Net provisions for risks and charges (48) (40) (16.7)Net adjustments to loans (1,512) (1,499) (0.9)Net impairment losses on other assets 0 0 n.m. Profits (Losses) on HTM and on other investments 0 0 n.m.
Income before tax from continuing operations 1,601 1,389 (13.2)Taxes on income from continuing operations (679) (558) (17.8)Charges (net of tax) for integration and exit incentives (17) (15) (11.8)Effect of purchase cost allocation (net of tax) (1) (4) 300.0Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m. Income (Loss) after tax from discontinued operations 42 42 0.0Minority interests 0 0 n.m.
Net income 946 854 (9.7)
MIL-BVA327-15051trim.13-90141/LR
Banca dei Territori: Q3 vs Q2
65
2Q16 3Q16 %
Net interest income 1,154 1,162 0.7Profits (losses) on investments carried at equity 0 0 n.m. Net fee and commission income 1,004 961 (4.3)Profits (Losses) on trading 15 17 17.9Income from insurance business 0 0 n.m. Other operating income (expenses) 118 6 (94.7)
Operating income 2,290 2,146 (6.3)Personnel expenses (775) (747) (3.6)Other administrative expenses (466) (451) (3.1)Adjustments to property, equipment and intangible assets (0) (0) (96.7)
Operating costs (1,241) (1,198) (3.5)Operating margin 1,049 949 (9.6)
Net provisions for risks and charges (19) (10) (46.8)Net adjustments to loans (485) (569) 17.4Net impairment losses on other assets (0) 0 n.m. Profits (Losses) on HTM and on other investments 0 0 n.m.
Income before tax from continuing operations 545 370 (32.2)Taxes on income from continuing operations (195) (167) (14.4)Charges (net of tax) for integration and exit incentives (8) (5) (39.3)Effect of purchase cost allocation (net of tax) (1) 0 n.m. Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m. Income (Loss) after tax from discontinued operations 14 14 (5.0)Minority interests 0 0 n.m.
Net income 356 212 (40.5)
Note: figures may not add up exactly due to rounding differences
€ m
MIL-BVA327-15051trim.13-90141/LR
Corporate and Investment Banking: 9M vs 9M
66Note: figures may not add up exactly due to rounding differences
€ m 9M15 9M16 %Restated
Net interest income 1,157 1,094 (5.4)Profits (losses) on investments carried at equity 6 6 0.0Net fee and commission income 612 698 14.1Profits (Losses) on trading 600 592 (1.3)Income from insurance business 0 0 n.m. Other operating income (expenses) 6 0 (100.0)
Operating income 2,381 2,390 0.4Personnel expenses (249) (258) 3.6Other administrative expenses (430) (422) (1.9)Adjustments to property, equipment and intangible assets (2) (3) 50.0
Operating costs (681) (683) 0.3Operating margin 1,700 1,707 0.4
Net provisions for risks and charges 2 (1) n.m. Net adjustments to loans (190) (195) 2.6Net impairment losses on other assets (4) (2) (50.0)Profits (Losses) on HTM and on other investments 0 20 n.m.
Income before tax from continuing operations 1,508 1,529 1.4Taxes on income from continuing operations (461) (470) 2.0Charges (net of tax) for integration and exit incentives 0 (4) n.m. Effect of purchase cost allocation (net of tax) 0 0 n.m. Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m. Income (Loss) after tax from discontinued operations 0 0 n.m. Minority interests 0 0 n.m.
Net income 1,047 1,055 0.8
MIL-BVA327-15051trim.13-90141/LR
Banca IMI: A Significant Contribution to Group Results
67
Note: figures may not add up exactly due to rounding differences(1) Banca IMI S.p.A. and its subsidiaries
~66% of Operating income is customer driven 9M16 average VaR at €89m9M16 Net income at €584m
€ mof which: Corporate & Strategic Finance
€ m
RWA (€ bn) 22.8 7.5 30.3
Cost/Income ratio 25.7% 32.1% 27.2%
Global Markets
Corporate &Strategic Finance
Total Banca IMI
Fixed Incomeand Commodity
Equity Brokerage GlobalMarkets
M&AAdvisory
StructuredFinance
Corporate &Strategic Finance
9M16 Results
€ m
Credits
286
9141,200
914
61 50165
638
Banca IMI Operating Income(1) of which: Global Markets
DebtMarkets
ECM
28619
21
198
48
+
MIL-BVA327-15051trim.13-90141/LR
Note: figures may not add up exactly due to rounding differences
€ m 2Q16 3Q16 %
Net interest income 365 383 4.7Profits (losses) on investments carried at equity 2 3 47.2Net fee and commission income 265 214 (19.2)Profits (Losses) on trading 265 112 (57.7)Income from insurance business 0 0 n.m. Other operating income (expenses) 0 0 (43.1)
Operating income 898 712 (20.7)Personnel expenses (89) (86) (3.8)Other administrative expenses (148) (137) (7.1)Adjustments to property, equipment and intangible assets (1) (1) 89.9
Operating costs (237) (224) (5.6)Operating margin 661 488 (26.1)
Net provisions for risks and charges (1) 0 n.m. Net adjustments to loans (86) (71) (17.0)Net impairment losses on other assets (1) (1) 0.0Profits (Losses) on HTM and on other investments 18 2 (88.9)
Income before tax from continuing operations 591 418 (29.2)Taxes on income from continuing operations (189) (120) (36.8)Charges (net of tax) for integration and exit incentives (3) (1) (70.8)Effect of purchase cost allocation (net of tax) 0 0 n.m. Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m. Income (Loss) after tax from discontinued operations 0 0 n.m. Minority interests 0 0 n.m.
Net income 399 298 (25.4)
Corporate and Investment Banking: Q3 vs Q2
68
MIL-BVA327-15051trim.13-90141/LR
Note: figures may not add up exactly due to rounding differences. Excluding the Ukrainian subsidiary Pravex-Bank and the Hungarian “bad bank” which are included in the Capital Light Bank
€ m
International Subsidiary Banks: 9M vs 9M
69
9M15 9M16 %Restated
Net interest income 1,118 1,095 (2.1)Profits (losses) on investments carried at equity 51 38 (25.5)Net fee and commission income 382 360 (5.8)Profits (Losses) on trading 81 91 12.3Income from insurance business 0 0 n.m. Other operating income (expenses) (58) 12 n.m.
Operating income 1,574 1,596 1.4Personnel expenses (409) (401) (2.0)Other administrative expenses (269) (250) (7.1)Adjustments to property, equipment and intangible assets (71) (67) (5.6)
Operating costs (749) (718) (4.1)Operating margin 825 878 6.4
Net provisions for risks and charges (178) 17 n.m. Net adjustments to loans (222) (147) (33.8)Net impairment losses on other assets (1) (2) 100.0Profits (Losses) on HTM and on other investments 1 4 300.0
Income before tax from continuing operations 425 750 76.5Taxes on income from continuing operations (111) (155) 39.6Charges (net of tax) for integration and exit incentives (3) (20) 566.7Effect of purchase cost allocation (net of tax) 0 0 n.m. Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m. Income (Loss) after tax from discontinued operations 3 3 0.0Minority interests (1) 0 (100.0)
Net income 313 578 84.7
MIL-BVA327-15051trim.13-90141/LR
€ m
Note: figures may not add up exactly due to rounding differences. Excluding the Ukrainian subsidiary Pravex-Bank and the Hungarian “bad bank” which are included in the Capital Light Bank
International Subsidiary Banks: Q3 vs Q2
70
2Q16 3Q16 %
Net interest income 360 367 2.0Profits (losses) on investments carried at equity 15 14 (7.2)Net fee and commission income 121 124 2.5Profits (Losses) on trading 27 31 12.1Income from insurance business 0 0 n.m. Other operating income (expenses) 42 (9) n.m.
Operating income 566 527 (6.8)Personnel expenses (131) (135) 3.1Other administrative expenses (86) (82) (4.3)Adjustments to property, equipment and intangible assets (22) (22) 3.5
Operating costs (239) (240) 0.5Operating margin 327 287 (12.1)
Net provisions for risks and charges 17 (3) n.m. Net adjustments to loans (64) (41) (35.9)Net impairment losses on other assets 1 (1) n.m. Profits (Losses) on HTM and on other investments (0) 1 n.m.
Income before tax from continuing operations 281 243 (13.3)Taxes on income from continuing operations (48) (54) 11.1Charges (net of tax) for integration and exit incentives (16) (1) (91.8)Effect of purchase cost allocation (net of tax) 0 0 n.m. Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m. Income (Loss) after tax from discontinued operations 1 1 4.3Minority interests (0) (0) (27.7)
Net income 217 190 (12.8)
MIL-BVA327-15051trim.13-90141/LR
Note: figures may not add up exactly due to rounding differences
€ m
€592m excluding the Effect of purchase cost allocation
Private Banking: 9M vs 9M
71
9M15 9M16 %
Net interest income 149 132 (11.4)Profits (losses) on investments carried at equity 9 9 0.0Net fee and commission income 1,111 1,128 1.5Profits (Losses) on trading 20 22 10.0Income from insurance business 0 0 n.m. Other operating income (expenses) (5) (1) (80.0)
Operating income 1,284 1,290 0.5Personnel expenses (211) (215) 1.9Other administrative expenses (164) (165) 0.6Adjustments to property, equipment and intangible assets (12) (11) (8.3)
Operating costs (387) (391) 1.0Operating margin 897 899 0.2
Net provisions for risks and charges (23) (40) 73.9Net adjustments to loans 0 5 n.m. Net impairment losses on other assets 0 0 n.m. Profits (Losses) on HTM and on other investments 0 0 n.m.
Income before tax from continuing operations 874 864 (1.1)Taxes on income from continuing operations (261) (249) (4.6)Charges (net of tax) for integration and exit incentives (23) (23) 0.0Effect of purchase cost allocation (net of tax) (63) (63) 0.0Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m. Income (Loss) after tax from discontinued operations 0 0 n.m. Minority interests 0 0 n.m.
Net income 527 529 0.4
MIL-BVA327-15051trim.13-90141/LR
Private Banking: Q3 vs Q2
72
€ m
Note: figures may not add up exactly due to rounding differences
2Q16 3Q16 %
Net interest income 42 44 2.8Profits (losses) on investments carried at equity 4 2 (61.4)Net fee and commission income 383 364 (4.9)Profits (Losses) on trading 1 12 n.m. Income from insurance business 0 0 n.m. Other operating income (expenses) (1) (1) 14.6
Operating income 430 421 (2.0)Personnel expenses (72) (73) 1.9Other administrative expenses (58) (57) (1.6)Adjustments to property, equipment and intangible assets (4) (4) 0.0
Operating costs (133) (134) 0.3Operating margin 296 288 (3.0)
Net provisions for risks and charges (15) (12) (15.2)Net adjustments to loans (1) (1) 71.4Net impairment losses on other assets 0 0 n.m. Profits (Losses) on HTM and on other investments 0 0 n.m.
Income before tax from continuing operations 281 274 (2.5)Taxes on income from continuing operations (79) (82) 3.4Charges (net of tax) for integration and exit incentives (10) (6) (41.2)Effect of purchase cost allocation (net of tax) (21) (21) 0.0Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m. Income (Loss) after tax from discontinued operations 0 0 n.m. Minority interests (0) 0 n.m.
Net income 170 165 (3.2)
€186m excluding the Effect of purchase cost allocation
MIL-BVA327-15051trim.13-90141/LR
€ m
Asset Management: 9M vs 9M
73Note: figures may not add up exactly due to rounding differences
+4% excluding performance fees
+6% excluding performance fees
+7% excluding performance fees
9M15 9M16 %
Net interest income 1 0 (100.0)Profits (losses) on investments carried at equity 66 53 (19.7)Net fee and commission income 482 407 (15.6)Profits (Losses) on trading 1 8 700.0Income from insurance business 0 0 n.m. Other operating income (expenses) 2 0 (100.0)
Operating income 552 468 (15.2)Personnel expenses (45) (42) (6.7)Other administrative expenses (55) (55) 0.0Adjustments to property, equipment and intangible assets 0 0 n.m.
Operating costs (100) (97) (3.0)Operating margin 452 371 (17.9)
Net provisions for risks and charges (1) 0 n.m. Net adjustments to loans 0 0 n.m. Net impairment losses on other assets 0 0 n.m. Profits (Losses) on HTM and on other investments 0 0 n.m.
Income before tax from continuing operations 451 371 (17.7)Taxes on income from continuing operations (108) (81) (25.0)Charges (net of tax) for integration and exit incentives 0 0 n.m. Effect of purchase cost allocation (net of tax) 0 0 n.m. Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m. Income (Loss) after tax from discontinued operations 0 0 n.m. Minority interests (6) (8) 33.3
Net income 337 282 (16.3)
MIL-BVA327-15051trim.13-90141/LR
€ m
Asset Management: Q3 vs Q2
74Note: figures may not add up exactly due to rounding differences
2Q16 3Q16 %
Net interest income 0 0 15.4Profits (losses) on investments carried at equity 17 19 12.5Net fee and commission income 135 145 7.5Profits (Losses) on trading (1) 4 n.m. Income from insurance business 0 0 n.m. Other operating income (expenses) (1) 0 n.m.
Operating income 151 168 11.6Personnel expenses (14) (14) 0.5Other administrative expenses (19) (18) (3.7)Adjustments to property, equipment and intangible assets (0) (0) (2.5)
Operating costs (33) (32) (1.9)Operating margin 118 136 15.3
Net provisions for risks and charges (0) 0 n.m. Net adjustments to loans 0 0 n.m. Net impairment losses on other assets (0) 0 n.m. Profits (Losses) on HTM and on other investments 0 0 n.m.
Income before tax from continuing operations 118 137 15.7Taxes on income from continuing operations (26) (30) 14.5Charges (net of tax) for integration and exit incentives (0) (0) n.m. Effect of purchase cost allocation (net of tax) 0 0 n.m. Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m. Income (Loss) after tax from discontinued operations 0 0 n.m. Minority interests (3) (4) 37.3
Net income 89 103 15.4
MIL-BVA327-15051trim.13-90141/LR
Note: figures may not add up exactly due to rounding differences
€ m
Insurance: 9M vs 9M
75
€576m excluding the Effect of purchase cost allocation
9M15 9M16 %
Net interest income 0 0 n.m. Profits (losses) on investments carried at equity 0 0 n.m. Net fee and commission income 0 0 n.m. Profits (Losses) on trading 0 0 n.m. Income from insurance business 934 973 4.2Other operating income (expenses) (3) (3) 0.0
Operating income 931 970 4.2Personnel expenses (47) (49) 4.3Other administrative expenses (62) (64) 3.2Adjustments to property, equipment and intangible assets (2) (2) 0.0
Operating costs (111) (115) 3.6Operating margin 820 855 4.3
Net provisions for risks and charges 0 (2) n.m. Net adjustments to loans 0 0 n.m. Net impairment losses on other assets (13) (9) (30.8)Profits (Losses) on HTM and on other investments 0 0 n.m.
Income before tax from continuing operations 807 844 4.6Taxes on income from continuing operations (238) (265) 11.3Charges (net of tax) for integration and exit incentives (3) (3) 0.0Effect of purchase cost allocation (net of tax) (22) (16) (27.3)Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m. Income (Loss) after tax from discontinued operations 0 0 n.m. Minority interests 0 0 n.m.
Net income 544 560 2.9
MIL-BVA327-15051trim.13-90141/LR
Insurance: Q3 vs Q2
76
€ m
Note: figures may not add up exactly due to rounding differences
2Q16 3Q16 %
Net interest income 0 0 n.m. Profits (losses) on investments carried at equity 0 0 n.m. Net fee and commission income 0 0 n.m. Profits (Losses) on trading 0 0 n.m. Income from insurance business 307 298 (2.8)Other operating income (expenses) (1) (1) (135.4)
Operating income 306 297 (3.0)Personnel expenses (17) (16) (2.2)Other administrative expenses (21) (22) 5.1Adjustments to property, equipment and intangible assets (1) (1) (0.2)
Operating costs (39) (39) 1.9Operating margin 267 257 (3.8)
Net provisions for risks and charges (1) (2) 120.9Net adjustments to loans 0 0 n.m. Net impairment losses on other assets (7) (1) (90.7)Profits (Losses) on HTM and on other investments 0 0 n.m.
Income before tax from continuing operations 259 255 (1.6)Taxes on income from continuing operations (76) (81) 6.5Charges (net of tax) for integration and exit incentives (1) (1) (39.2)Effect of purchase cost allocation (net of tax) (6) (6) (8.3)Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m. Income (Loss) after tax from discontinued operations 0 0 n.m. Minority interests 0 0 n.m.
Net income 176 168 (4.7)
€174m excluding the Effect of purchase cost allocation
MIL-BVA327-15051trim.13-90141/LR
Quarterly P&L Analysis
77
€ m
Note: figures may not add up exactly due to rounding differences
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
Net interest income 1,950 1,954 1,887 1,926 1,855 1,831 1,859Profits (losses) on investments carried at equity 39 15 41 1 74 84 30Net fee and commission income 1,775 1,941 1,748 1,878 1,676 1,848 1,745Profits (Losses) on trading 596 380 1 57 228 467 248Income from insurance business 343 282 241 131 332 239 258Other operating income (expenses) (77) (59) 209 (378) (142) 136 (104)
Operating income 4,626 4,513 4,127 3,615 4,023 4,605 4,036Personnel expenses (1,295) (1,263) (1,249) (1,479) (1,275) (1,338) (1,306)Other administrative expenses (629) (668) (632) (791) (595) (638) (625)Adjustments to property, equipment and intangible assets (174) (176) (178) (200) (177) (178) (186)
Operating costs (2,098) (2,107) (2,059) (2,470) (2,047) (2,154) (2,117)Operating margin 2,528 2,406 2,068 1,145 1,976 2,451 1,919
Net provisions for risks and charges (54) (68) (222) (55) (16) (97) (51)Net adjustments to loans (767) (847) (769) (923) (694) (923) (917)Net impairment losses on other assets (9) (31) (20) (108) (20) (36) (28)Profits (Losses) on HTM and on other investments 28 38 21 51 (5) (35) 18
Income before tax from continuing operations 1,726 1,498 1,078 110 1,241 1,360 941Taxes on income from continuing operations (634) (502) (339) (60) (383) (340) (278)Charges (net of tax) for integration and exit incentives (6) (25) (15) (37) (13) (38) (16)Effect of purchase cost allocation (net of tax) (26) (33) (27) (33) (29) (27) (26)Impairment (net of tax) of goodwill and other intangible assets 0 0 0 0 0 0 0Income (Loss) after tax from discontinued operations 15 14 15 15 13 15 16Minority interests (11) (12) 10 18 (23) (69) (9)
Net income 1,064 940 722 13 806 901 628
Restated
Net Fee and Commission Income
78
Net Fee and Commission Income: Quarterly Development Breakdown€ m
Note: figures may not add up exactly due to rounding differences
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
Guarantees given / received 92 78 88 86 83 83 90
Collection and payment services 86 95 89 104 85 91 90
Current accounts 254 255 268 255 247 255 251
Credit and debit cards 86 96 106 92 90 94 98
Commercial banking activities 518 524 551 537 505 523 529 Dealing and placement of securities 233 197 107 118 91 153 137
Currency dealing 11 11 11 11 10 10 10
Portfolio management 514 590 552 564 493 512 504
Distribution of insurance products 265 335 300 332 327 362 335
Other 45 48 42 49 41 38 47
Management, dealing and consultancy activities 1,068 1,181 1,012 1,074 962 1,075 1,033 Other net fee and commission income 189 236 185 267 209 250 183
Net fee and commission income 1,775 1,941 1,748 1,878 1,676 1,848 1,745
Restated
79
Market Leadership in Italy
9M16 Operating IncomeBreakdown by business area(1)
Leader in Italy(data as of 30.9.16)
Market share
Note: figures may not add up exactly due to rounding differences(1) Excluding Corporate Centre(2) Including bonds(3) Data as of 30.6.16(4) Mutual funds; data as of 30.6.16
Ranking
Insurance 7%
10%Private Banking
Asset Management
4%
InternationalSubsidiary
Banks
12%
Bancadei Territori49%
18%
Corporate and Investment Banking
Factoring
15.8
Asset Management(4)
Pension Funds(3)
Loans
16.4
19.3
29.2
Life Premiums(3)
Deposits(2)
21.7
20.1
1
1
1
1
1
%
1
80
International Subsidiary Banks: Key P&L Data by Country
Pre-Tax Income
€ m € m
Operating Income Operating Costs
€ m€ m
Operating Margin
2829304664139159278
369396
Bosn
ia
Slov
enia
Alba
nia
Rus
sian
F.
Hun
gary
Rom
ania
Egyp
t
Cro
atia
Slov
akia
Serb
ia
12141834366779120143169
Alba
nia
Slov
enia
Bosn
ia
Rus
sian
F.
Serb
ia
Rom
ania
Cro
atia
Hun
gary
Egyp
t
Slov
akia
10111517306092158
226227
Egyp
t
Slov
akia
Serb
ia
Cro
atia
Hun
gary
Rom
ania
Slov
enia
Alba
nia
Rus
sian
F.
Bosn
ia 0
91216186272166167193
Egyp
t
Rus
sian
F.
Rom
ania
Serb
ia
Hun
gary
Alba
nia
Bosn
ia
Slov
enia
Slov
akia
Cro
atia
Data as of 30.9.16
Note: excluding the Ukrainian subsidiary Pravex-Bank and the Hungarian ‘’bad bank’’ included in the Capital Light Bank
(Δ% vs 9M15)
0.2 +12.9 (3.0) (10.2) +3.2+15.7 (34.3) (8.6) (10.7)+3.3 +1.7 (1.2) (7.0) (16.6) (11.9)+0.4 (2.9) +3.9 (0.5)(15.5)
+24.1(0.9) +0.4 (16.5) +2.7n.m. (16.6) (3.0) (63.9)+11.2 n.m. +31.1+2.9 +17.1 +7.3n.m. +35.6 +98.8+60.7 (6.9)
81
International Subsidiary Banks by Country: ~8% of the Group’s Total Loans
Note: figures may not add up exactly due to rounding differences. Excluding the Ukrainian subsidiary Pravex-Bank which is included in the Capital Light Bank(*) Balance sheet figures incorporate the Hungarian “bad bank” which is included in the Capital Light Bank
Hungary(*) Slovakia Slovenia Croatia Serbia Bosnia Albania Romania Russian F. Egypt
CEETotal Total
Data as of 30.9.16
Oper. Income (€ m) 139 396 64 369 159 30 28 29 46 1,260 278 1,539
% of Group total 1.1% 3.1% 0.5% 2.9% 1.3% 0.2% 0.2% 0.2% 0.4% 10.0% 2.2% 12.1%
Net income (€ m) 40 126 15 152 61 10 14 9 (0) 426 112 538
% of Group total 1.7% 5.4% 0.6% 6.5% 2.6% 0.4% 0.6% 0.4% n.m. 18.2% 4.8% 23.0%
Customer Deposits (€ bn) 3.6 11.3 1.8 7.3 3.1 0.6 0.9 0.6 0.4 29.6 4.4 34.1
% of Group total 1.0% 3.0% 0.5% 1.9% 0.8% 0.2% 0.2% 0.2% 0.1% 7.8% 1.2% 9.0%
Customer Loans (€ bn) 2.6 10.5 1.4 6.3 2.3 0.6 0.3 0.6 0.5 25.1 2.6 27.7
% of Group total 0.7% 2.9% 0.4% 1.7% 0.6% 0.2% 0.1% 0.2% 0.1% 6.9% 0.7% 7.6%
Total Assets (€ bn) 5.2 13.8 2.2 9.9 4.4 0.9 1.1 0.9 0.8 39.2 5.4 44.6
% of Group total 0.7% 1.9% 0.3% 1.4% 0.6% 0.1% 0.2% 0.1% 0.1% 5.5% 0.8% 6.2%
Book value (€ m) 707 1,396 278 1,824 1,001 118 131 116 169 5,740 477 6,217 - goodwill/intangibles 22 60 4 12 6 4 4 10 122 3 125
82
International Subsidiary Banks by Country: Loans Breakdown and Coverage
Note: figures may not add up exactly due to rounding differences. Excluding the Ukrainian subsidiary Pravex-Bank which is included in the Capital Light Bank (*) Including the Hungarian “bad bank” which is included in the Capital Light Bank(1) Sofferenze(2) Including Past due(3) Net adjustments to loans/Net customer loans
Data as of 30.9.16
Hungary(*) Slovakia Slovenia Croatia Serbia Bosnia Albania Romania Russian F. Egypt
CEETotal Total
Performing loans (€ bn) 2.3 10.2 1.3 6.0 2.1 0.6 0.3 0.6 0.4 23.7 2.4 26.1of which:Retail local currency 39% 55% 49% 21% 21% 10% 12% 33% 5% 39% 57% 40%Retail foreign currency 0% 0% 0% 32% 26% 41% 15% 39% 0% 12% 0% 11%Corporate local currency 33% 39% 49% 12% 4% 27% 23% 10% 88% 29% 29% 29%Corporate foreign currency 28% 6% 2% 35% 49% 23% 50% 18% 7% 20% 14% 20%
Bad loans(1) (€ m) 130 125 55 99 96 11 15 9 25 565 5 570
Unlikely to pay(2) (€ m) 225 116 45 218 75 5 15 12 24 735 169 904
Performing loans coverage 2.5% 0.9% 1.2% 1.2% 0.7% 0.7% 4.0% 1.7% 2.1% 1.2% 2.3% 1.3%
Bad loans(1) coverage 60% 66% 61% 70% 61% 77% 44% 64% 74% 65% 96% 67%
Unlikely to pay(2) coverage 42% 36% 33% 32% 45% 38% 42% 37% 52% 39% 29% 37%
Annualised cost of credit(3) (bps) n.m. 73 130 73 116 74 n.m. 24 237 58 48 57
MIL-BVA327-15051trim.13-90141/LRCommon Equity Ratio as of 30.9.16: from Phased-in to Pro-forma Fully Loaded
83
Note: figures may not add up exactly due to rounding differences(1) Considering the expected absorption of DTA on losses carried forward (€0.2bn as of 30.9.16)(2) Other DTA: mostly related to provisions for risks and charges. DTA related to goodwill realignment and adjustments to loans are excluded due to their treatment as credits to tax authorities(3) Considering the total absorption of DTA convertible into tax credit related to goodwill realignment (€4.9bn as of 30.9.16) and adjustments to loans (€3.6bn as of 30.9.16)
Transitional adjustmentsReserve shortfall (0.0) (0)Valuation reserves (0.2) (6)Minorities exceeding requirements (0.1) (2)DTA on losses carried forward(1) 0.1 4
Total (0.1) (5)
Deductions exceeding cap(*)
Total (0.9) (35)
(*) as a memo, constituents of deductions subject to cap: - Other DTA(2) 1.5 - Investments in banking and financial companies 0.8 - Investments in insurance companies 4.7
RWA from 100% weighted DTA(3) (8.5) 38
Benefit from the Danish Compromise 14Total estimated impact 12
Pro-forma fully loaded Common Equity ratio 13.0%
~€ bn ~bps
84
Total Exposure(1) by Main Countries
Note: figures may not add up exactly due to rounding differences (1) Exposure to sovereign risks (central and local governments), banks and other customers. Book Value of Debt Securities and Net Loans as of 30.9.16(2) Excluding securities in which money is collected through insurance policies where the total risk is retained by the insured
€ m DEBT SECURITIESBanking Business
L&R AFS HTM CFV (2) HFT TotalEU Countries 9,692 50,833 968 955 7,948 70,396 66,514 136,910 348,550
Austria 134 36 4 0 50 224 5 229 718Belgium 0 938 0 0 209 1,147 191 1,338 1,050Bulgaria 0 0 0 0 1 1 82 83 13Croatia 181 156 2 746 69 1,154 78 1,232 6,290Cyprus 0 0 0 0 0 0 0 0 100Czech Republic 0 0 0 0 0 0 0 0 682Denmark 0 53 0 0 18 71 44 115 176Estonia 0 0 0 0 0 0 0 0 2Finland 0 161 0 0 60 221 32 253 98France 155 3,594 0 201 331 4,281 1,569 5,850 3,467Germany 72 5,336 4 0 1,789 7,201 1,890 9,091 3,991Greece 16 0 0 0 0 16 0 16 8Hungary 50 453 0 0 136 639 38 677 2,793Ireland 198 330 0 0 190 718 256 974 300Italy 7,716 28,334 355 0 4,124 40,529 57,234 97,763 287,507Latvia 0 14 0 0 0 14 0 14 52Lithuania 0 97 0 0 0 97 0 97 9Luxembourg 155 23 0 0 141 319 132 451 3,595Malta 0 0 0 0 0 0 0 0 139The Netherlands 71 831 0 0 582 1,484 901 2,385 4,111Poland 32 51 0 0 0 83 20 103 699Portugal 207 0 0 0 14 221 14 235 236Romania 0 118 0 0 -1 117 140 257 766Slovakia 0 528 603 0 0 1,131 0 1,131 9,209Slovenia 0 272 0 0 0 272 8 280 1,392Spain 358 9,303 0 0 20 9,681 2,254 11,935 2,123Sweden 0 8 0 0 95 103 5 108 161United Kingdom 347 197 0 8 120 672 1,621 2,293 18,863
North African Countries 0 1,326 0 0 0 1,326 0 1,326 2,703Algeria 0 0 0 0 0 0 0 0 6Egypt 0 1,326 0 0 0 1,326 0 1,326 2,628Libya 0 0 0 0 0 0 0 0 5Morocco 0 0 0 0 0 0 0 0 57Tunisia 0 0 0 0 0 0 0 0 7
Japan 0 14 0 0 951 965 124 1,089 465Other Countries 427 7,609 345 48 1,384 9,813 5,213 15,026 26,434
LOANSInsurance Business Total
MIL-BVA327-15051trim.13-90141/LR
Exposure to Sovereign Risks(1) by Main Countries
85
DEBT SECURITIESBanking Business
L&R AFS HTM CFV (2) HFT (3) TotalEU Countries 6,961 47,643 964 745 4,726 61,039 56,470 117,509 425 17,734
Austria 0 0 4 0 0 4 3 7 0 0Belgium 0 903 0 0 16 919 8 927 5 0Bulgaria 0 0 0 0 0 0 60 60 0 0Croatia 95 156 2 745 67 1,065 61 1,126 0 997Cyprus 0 0 0 0 0 0 0 0 0 0Czech Republic 0 0 0 0 0 0 0 0 0 9Denmark 0 18 0 0 0 18 0 18 0 0Estonia 0 0 0 0 0 0 0 0 0 0Finland 0 144 0 0 5 149 9 158 0 7France 103 3,240 0 0 119 3,462 149 3,611 7 14Germany 0 5,186 0 0 1,325 6,511 1,097 7,608 19 0Greece 0 0 0 0 0 0 0 0 0 0Hungary 37 453 0 0 136 626 38 664 0 174Ireland 0 78 0 0 -1 77 101 178 2 0
Italy 6,422 26,740 355 0 3,123 36,640 53,437 90,077 334 15,869
Latvia 0 14 0 0 0 14 0 14 0 52Lithuania 0 97 0 0 0 97 0 97 0 0Luxembourg 0 0 0 0 0 0 0 0 0 0Malta 0 0 0 0 0 0 0 0 0 0The Netherlands 0 550 0 0 85 635 126 761 3 0Poland 32 51 0 0 0 83 20 103 1 0Portugal 17 0 0 0 0 17 0 17 0 25Romania 0 118 0 0 -1 117 140 257 3 2Slovakia 0 386 603 0 0 989 0 989 6 132Slovenia 0 242 0 0 0 242 8 250 6 172Spain 255 9,267 0 0 -135 9,387 1,213 10,600 39 281Sweden 0 0 0 0 -1 -1 0 -1 0 0United Kingdom 0 0 0 0 -12 -12 0 -12 0 0
North African Countries 0 1,325 0 0 0 1,325 0 1,325 -5 0Algeria 0 0 0 0 0 0 0 0 0 0Egypt 0 1,325 0 0 0 1,325 0 1,325 -5 0Libya 0 0 0 0 0 0 0 0 0 0Morocco 0 0 0 0 0 0 0 0 0 0Tunisia 0 0 0 0 0 0 0 0 0 0
Japan 0 0 0 0 707 707 0 707 0 0Other Countries 70 6,181 345 1 229 6,826 461 7,287 2 277
Insurance Business Total
AFS Reserve(4)
LOANS
Note: figures may not add up exactly due to rounding differences (1) Exposure to central and local governments. Book Value of Debt Securities and Net Loans as of 30.9.16(2) Excluding securities in which money is collected through insurance policies where the total risk is retained by the insured(3) Taking into account cash short positions (4) Net of tax and allocation to insurance products under separate management; referred to all debt securities; almost entirely regarding sovereign risks
€ m
Banking Business Government bondduration: ~5.3 yearsAdjusted duration due to hedging: ~0.3 years
MIL-BVA327-15051trim.13-90141/LR
Exposure to Banks by Main Countries(1)
86
Note: figures may not add up exactly due to rounding differences (1) Book Value of Debt Securities and Net Loans as of 30.9.16 (2) Excluding securities in which money is collected through insurance policies where the total risk is retained by the insured
€ mDEBT SECURITIES
Banking BusinessL&R AFS HTM CFV (2) HFT Total
EU Countries 847 1,486 4 201 1,390 3,928 4,034 7,962 20,835Austria 124 12 0 0 41 177 0 177 337Belgium 0 24 0 0 145 169 59 228 768Bulgaria 0 0 0 0 0 0 0 0 1Croatia 58 0 0 0 0 58 0 58 46Cyprus 0 0 0 0 0 0 0 0 0Czech Republic 0 0 0 0 0 0 0 0 0Denmark 0 25 0 0 18 43 16 59 92Estonia 0 0 0 0 0 0 0 0 0Finland 0 17 0 0 35 52 0 52 79France 0 208 0 201 158 567 535 1,102 1,909Germany 4 50 4 0 360 418 161 579 1,813Greece 0 0 0 0 0 0 0 0 2Hungary 0 0 0 0 0 0 0 0 194Ireland 0 94 0 0 0 94 90 184 66Italy 437 733 0 0 156 1,326 1,881 3,207 6,336Latvia 0 0 0 0 0 0 0 0 0Lithuania 0 0 0 0 0 0 0 0 5Luxembourg 60 0 0 0 70 130 100 230 1,906Malta 0 0 0 0 0 0 0 0 100The Netherlands 22 75 0 0 249 346 314 660 506Poland 0 0 0 0 0 0 0 0 174Portugal 0 0 0 0 0 0 1 1 15Romania 0 0 0 0 0 0 0 0 91Slovakia 0 142 0 0 0 142 0 142 1Slovenia 0 23 0 0 0 23 0 23 4Spain 0 0 0 0 118 118 305 423 738Sweden 0 0 0 0 -2 -2 2 0 20United Kingdom 142 83 0 0 42 267 570 837 5,632
North African Countries 0 1 0 0 0 1 0 1 83Algeria 0 0 0 0 0 0 0 0 1Egypt 0 1 0 0 0 1 0 1 21Libya 0 0 0 0 0 0 0 0 0Morocco 0 0 0 0 0 0 0 0 57Tunisia 0 0 0 0 0 0 0 0 4
Japan 0 14 0 0 117 131 46 177 19Other Countries 160 1,010 0 47 666 1,883 2,230 4,113 6,881
LOANSInsurance Business Total
MIL-BVA327-15051trim.13-90141/LR
Exposure to Other Customers by Main Countries(1)
87
Note: figures may not add up exactly due to rounding differences (1) Book Value of Debt Securities and Net Loans as of 30.9.16(2) Excluding securities in which money is collected through insurance policies where the total risk is retained by the insured
€ mDEBT SECURITIES
Banking BusinessL&R AFS HTM CFV (2) HFT Total
EU Countries 1,884 1,704 0 9 1,832 5,429 6,010 11,439 309,981Austria 10 24 0 0 9 43 2 45 381Belgium 0 11 0 0 48 59 124 183 282Bulgaria 0 0 0 0 1 1 22 23 12Croatia 28 0 0 1 2 31 17 48 5,247Cyprus 0 0 0 0 0 0 0 0 100Czech Republic 0 0 0 0 0 0 0 0 673Denmark 0 10 0 0 0 10 28 38 84Estonia 0 0 0 0 0 0 0 0 2Finland 0 0 0 0 20 20 23 43 12France 52 146 0 0 54 252 885 1,137 1,544Germany 68 100 0 0 104 272 632 904 2,178Greece 16 0 0 0 0 16 0 16 6Hungary 13 0 0 0 0 13 0 13 2,425Ireland 198 158 0 0 191 547 65 612 234Italy 857 861 0 0 845 2,563 1,916 4,479 265,302Latvia 0 0 0 0 0 0 0 0 0Lithuania 0 0 0 0 0 0 0 0 4Luxembourg 95 23 0 0 71 189 32 221 1,689Malta 0 0 0 0 0 0 0 0 39The Netherlands 49 206 0 0 248 503 461 964 3,605Poland 0 0 0 0 0 0 0 0 525Portugal 190 0 0 0 14 204 13 217 196Romania 0 0 0 0 0 0 0 0 673Slovakia 0 0 0 0 0 0 0 0 9,076Slovenia 0 7 0 0 0 7 0 7 1,216Spain 103 36 0 0 37 176 736 912 1,104Sweden 0 8 0 0 98 106 3 109 141United Kingdom 205 114 0 8 90 417 1,051 1,468 13,231
North African Countries 0 0 0 0 0 0 0 0 2,620Algeria 0 0 0 0 0 0 0 0 5Egypt 0 0 0 0 0 0 0 0 2,607Libya 0 0 0 0 0 0 0 0 5Morocco 0 0 0 0 0 0 0 0 0Tunisia 0 0 0 0 0 0 0 0 3
Japan 0 0 0 0 127 127 78 205 446Other Countries 197 418 0 0 489 1,104 2,522 3,626 19,276
LOANSInsurance Business Total
MIL-BVA327-15051trim.13-90141/LR
Disclaimer
88
“The manager responsible for preparing the company’s financial reports, Fabrizio Dabbene, declares, pursuant toparagraph 2 of Article 154 bis of the Consolidated Law on Finance, that the accounting information contained in
this presentation corresponds to the document results, books and accounting records”.
* * *This presentation includes certain forward looking statements, projections, objectives and estimates reflecting the current views of the management of the Company with respect to future events. Forward looking statements, projections, objectives, estimates and forecasts are generally identifiable by the use of the words “may,” “will,” “should,” “plan,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “project,” “goal” or “target” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts, including, without limitation, those regarding the Company’s future financial position and results of operations, strategy, plans, objectives, goals and targets and future developments in the markets where the Company participates or is seeking to participate.
Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements as a prediction of actual results. The Group’s ability to achieve its projected objectives or results is dependent on many factors which are outside management’s control. Actual results may differ materially from (and be more negative than) those projected or implied in the forward-looking statements. Such forward-looking information involves risks and uncertainties that could significantly affect expected results and is based on certain key assumptions.
All forward-looking statements included herein are based on information available to the Company as of the date hereof. The Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by applicable law. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements.